CIBC creates Simplii with PC Financial Customers

Effective November 1, 2017, the jointe venture between Loblaws and CIBC (who ran PC Financial) will terminate. Going forward, PC Financial’s banking clients (over 2 million) will be transferred to CIBC’s new direct banking subsidiary Simplii Financial.

PC Financial’s Perspective

The PC Financial’s credit card customers remained unaffected. Which means that the PC Points program with continue business as usual and still run by Loblaws. Do note when your PC Financial banking service is move to Simplii, you will no longer automatically accumulate PC Points with your banking services.

I think that Loblaws may have done a smart move. They sold a fairly successful (2 million clients) portion of their business to focus on their most solid financial product, co-branded credit cards.

Simplii’s Perspective

To me, Simplii is clearly going to be in direct competition with Tangerine, which I am very happy to see. I am a CIBC and Tangerine banking client, so I am more than happy to see them compete. If Simplii can at least offer a product on par with Tangerine, it can raise the competition. However, Simplii disappoints at the launch, there will be a very short honeymoon period.

CIBC’s Perspective

CIBC is the smallest of the big 5 banks (RBC, TD, Scotiabank, BMO), so now they have a chance to compete. I am going into this with a positive attitude because I am expecting Simplii to be launched with a bang. Why would CIBC make such a move if they not have a plan in mind to go big?

Please do not disappoint my endorsement CIBC!

Am I being too optimistic?